Departmental Profit is calculated by taking Gross Profit minus Departmental Expenses. To make sense of this figure it is always expressed as a percentage of Turnover when used for trending as it is the direction of travel that is of most interest to you.
Example:
A) Departmental Profit = R57,907 B) Departmental Turnover = R165,446 C) Departmental Profit % = 35% (A ÷ B X 100)
Discussion:
Related Terminology:
The
Departmental Profit of the Service Department is also called many other
things such as, Direct Profit, Operating Profit and of course the
bottom line.